Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

Lev (or whoever answers :)This is a follow-up question

Customer Question
Hi Lev (or whoever answers...
Hi Lev (or whoever answers :)This is a follow-up question to one you answered a few months ago. Following is the original question and your answer, and finally the new question is at the end.QUESTION
I am the successor trustee of a California irrevocable living trust. Both my parents have been deceased for three years. We are now selling the house, which has appreciated approximately $150,000 in the three years since their death. It sold for 1.1 million dollars. The house has been in the name ofthe trust since 2007. Am I free to distribute all the proceeds from the sale to the successors or must the living trust pay capital gains or some other tax before I do so?ANSWER
After your parents passed away - that is not a living trust anymore.
The trust became irrevocable after they passed away - and it is a separated legal and taxing entity.
You are correct that for income tax purposes - the basis of inherited assets is the fair market value of the house when your parents passed away - so-called stepped up basis.So the taxable capital gain will be the difference between the selling price and the basis.You may distribute all funds to beneficiaries - that is not an issue.
However - the trust will file an income tax return - form 1041. Then - taxable income will be passed to beneficiaries and reported on K1 - so each beneficiary will include into individual tax return his/her share of taxable income passed from the trust.So - you might want to inform beneficiaries - so K1 would not be a surprise for them.But funds may be distributed and the trust will NOT have any income tax liability.NEW QUESTION
Do I report the sale of the house on 8949 and use those values on 1041? Are there any other federal forms needed to complete this?Also, what equivalent State of California forms do I need to complete for the same scenario?Thanks!Chuck
Submitted: 1 year ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 11 minutes by:
4/15/2016
Tax Professional: Lev, Tax Advisor replied 1 year ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,164
Experience: Taxes, Immigration, Labor Relations
Verified
Yes - the sale of inherited property is reported on form 8949.The challenge woudl be to determine the basis...There is no separate reporting on CA for sale transaction, but you will use federal information for the state tax return.So be sure to complete federal tax return first.
Ask Your Own Tax Question
Customer reply replied 1 year ago
Thank you. Which information from the federal forms will I be recording on state forms, and on which state forms / lines will I record them? I'm speaking as the Trustee, not as an heir receiving the distributed funds.
Tax Professional: Lev, Tax Advisor replied 1 year ago
on schedule D you report the same information as on form 8949
Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 1 year ago
https://www.ftb.ca.gov/forms/2015/15_541d.pdfYou will calculate gain or loss and will transfer that amount toform 541 - line 4 Capital gain or (loss).https://www.ftb.ca.gov/forms/2015/15_541.pdf Enter federal adjusted gross income from Form 1040, line 37That amount includes the gain on the property that is calculated on your federal tax return.There is nothing you need to reported in additional to that..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.
Ask Your Own Tax Question
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,164
30,164 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Suppose my taxable income in 220,000 this year and the tax
Suppose my taxable income in 220,000 this year and the tax rate is X up to 200K, but Y for 200and over, do I pay Y on the full 220K or just that above 200K? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Figure out how much is my tax liability + my capital gains +
Figure out how much is my tax liability + my capital gains + depreciation recapture tax … read more
Lev
Lev
Tax Advisor
30,164 satisfied customers
Is the sale of customer list a capital gain or ordinary income?
Is the sale of self-created intangibles, such customer lists, digital files, web sites, etc subject to capital gain or ordinary income treatment?… read more
Lev
Lev
Tax Advisor
30,164 satisfied customers
Are you familiar with Capital Gain taxes on rental property?
Are you familiar with Capital Gain taxes on rental property? … read more
Lev
Lev
Tax Advisor
30,164 satisfied customers
I need to get a copy of my 2015 state and federal tax. I
i need to get a copy of my 2015 state and federal tax … read more
abci168
abci168
Principal
27 satisfied customers
We have $400,000 in capital gains for the sale of our
We have $400,000 in capital gains for the sale of our California home of … read more
Lev
Lev
Tax Advisor
30,164 satisfied customers
For a California trust's final return there will be unused
For Barbara: For a California trust's final return there will be unused capital losses left over. All the beneficiaries are California resident individuals. The trust is administering a decedent's est… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Adjusted individual tax return for 2014(Iowa),says no
Adjusted individual tax return for 2014(Iowa),says no response to letter of inquiry,disallowed health insurance. deduction.says my wife and I owe$600.00.she called # and was told to show proof of insu… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Estate capital gains tax rate for 61, single, unable to
estate capital gains tax rate for 61, single, unable to work, is claimed as a dependent form sister,only income collects $500 month stipend from gov., which pays for health insurance and meds. is gett… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
A Form 1041 is filed for a Credit Shelter Trust & shows a
A Form 1041 is filed for a Credit Shelter Trust & shows a loss on the Taxable Income line (Page 1, line 22). Is this loss carried forward?… read more
abci168
abci168
Principal
27 satisfied customers
I have inherited a property in California that is currently
I have inherited a property in California that is currently in escrow. How will I be taxed for the money I make on the sale of the property? … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
738 satisfied customers
I recently filed amended federal tax returns (1040x) for
I recently filed amended federal tax returns (1040x) for 2013 and 2014. I have received a refund for 2014 and am answering some additional questions for 2013. Do I need to file amended tax returns for… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What would the federal and state tax rate percentages be for
What would the federal and state tax rate percentages be for a $7700 IRA early withdrawal in Ohio?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Form 1041 questions Where do you enter the 2k bond
Form 1041 questionsWhere do you enter the 2k bond premium-tax-exempt obligations on Form 1041. the 2k is shown on Form 1099-INT under Adjustments to interest and original issue discount… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Lev, where in the california return form 100s one report the
Good evening Lev, where in the california return form 100s one report the tax withholding from 1099k. Does this tax withholding flows through personal tax return or applies towards 100s estimated paym… read more
Lev
Lev
Tax Advisor
30,164 satisfied customers
THE irs STATED THAT TE TAXCALULATED ON SCHEDULE D WAS
tHE irs STATED THAT TE TAXCALULATED ON SCHEDULE D WAS INCORRECT . i CAN NOT ACCERSS dD. p;EASE DVISE HOW I CAN ACEESS THE SCHEDULE … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Form 1040 line #44 what taxes--federal income tax + social
form 1040 line #44 what taxes--federal income tax + social security +medicare tax, all or just federal? … read more
Lev
Lev
Tax Advisor
30,164 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x